We are not meant to be shopping any more or rather we are meant to be shopping smarter, buying investment pieces instead of landfill and being rather puritanical and sensible about fashion. But now it appears there's a way to continue having fun without racking up an enormous credit-card bill. The fashion phrase du jour is "shopping your wardrobe". Magazines from Vogue to Grazia are encouraging us to re-explore our closets for hidden treasures rather than buying endless amounts of tat that date after one season. But how to go about it?

I start out on the fashion and social networking site ClosetCouture.com, which allows you to create an online wardrobe. You can chop and change outfits on a mannequin; other members can also create looks for you.

First I photograph every single item I own - and there are more than 300 of them - in front of a white background and upload the images to the site (there are step-by-step instructions, so even the technically inept can work it out). This takes a really long time. Thankfully, basics such as T-shirts and jeans are already uploaded, which saves some time.

My virtual wardrobe is a total revelation. I'm shocked by how much I own. Everything is sectioned into categories so you can see immediately how many jackets (22), trousers (1), cardigans (18), black dresses (24) and shoes (100+) you have. All those pieces that fall down the back of the wardrobe or are stored 10 to a hanger quickly add up.

The experience feels a little like the bit in the TV show Gok's Fashion Fix, where he hangs his makeover victim's clothes out on a washing line of shame. Gok Wan recommends creating a capsule wardrobe of 20 pieces.

This fills me with horror. I take more than that on a weekend away. I prefer the dressing-up box approach.

But seeing it all laid out in front of me I'm ashamed at how much identical stuff I own. Yes, stripy tops, I mean you. I own 25 of them, ranging from high street to high end. Obviously, I think each and every one is unique, but anyone else would be hard pressed to tell them apart. I also own five sequined dresses and two capes. Judged on this, I am obviously a cruise-ship entertainer.

Now I'm up and running I start creating looks. This is much easier and more accessible on screen than in the reality of my dimly lit wardrobe. You can swap items and accessories from the mannequin with the click of your mouse to see which works best. I decide to establish myself online as a chic dresser (if not in real life). My first look - stripy top (of course), classic trench, jeans and ballet pumps - is rated as four out of five by other members.

They soon start suggesting outfits for me. Jerseygirl pings me a look - Easy Boho - consisting of a print dress, Topshop grey blazer, sunglasses and black ballet pumps. It's like having a free stylist. Fashionista13 creates Afternoon Tea using my Kate Moss for Topshop red pansy dress, black ballet pumps, aviators and a Linea Pelle bag that is on my wish list. I haven't worn the dress for months but she has made me want to dust it off again. I wear it later that week and the experience encourages me to dig out other items that have been "archived". By adding a different pair of shoes or a clashing jacket they suddenly look much more modern. Seeing my wardrobe through others' eyes freshens it up for me.

As I create more looks I start to see why I can never find anything to wear. I have far more tops than skirts and trousers.

There is also a total lack of practicality in my wardrobe - lots of four-inch heels and sparkly numbers but very little for work or an afternoon with friends in the park.

I telephone the self-proclaimed Practical Princess, celebrity stylist Elika Gibbs. "The key to getting it right is hanging your clothes properly, then you can see at a glance what you have," she says. "Split your clothes into sections by item and colour. You'll see a pattern emerge of what you buy, which will help you next time you shop. Be realistic about your lifestyle and what you need." That'll be the end of the sequins then.

Now that I've assessed everything I own and even managed to fall back in love with my clothes, I'm ready to go shopping again. (There has to be some incentive to go through all this - but if you're credit crunching, you could consider this phase optional.) The key now is to spend wiser. I create a list of gaps I need to fill (another of Gibbs's tips). I'm lacking colour, a tailored pair of trousers in navy or black and some skirts. But will my resolve and new set of rules hold up in the shops or will I fall back into bad habits? I head straight for the skirt section. I spy one that I love and it passes the checklist. Then I spot the perfect pink jumper to bring some colour to my wardrobe. Sadly, it's not all good news and I give in to the siren call of yet another Breton top (but this is different because it has longer sleeves, honest).

The best thing is that by considering my wardrobe as a whole rather than just using the bits I can see, I have given a fresh lease of life to my rediscovered favourites. Those old clothes don't look so old any more.